Texas newspapers are facing the threat of higher postal rates and slower service unless a postal reform measure known as HR 756 passes Congress. For the sake of newspapers and everyone who uses the U.S. mail, we desperately need to get this bill moving.
HR 756 is stalled in the House Ways and Means Committee because of concerns by the chairman, Rep. Kevin Brady, R-The Woodlands. We’ve tried to address his concerns several times, but to no avail. So now we need his fellow Texas delegation members to urge him to send the bill to the House floor for a vote. We’re asking you to contact your congressman and urge him or to do that.
Unless Rep. Brady can be persuaded to allow a vote on this bill, community newspapers will suffer from another round of mail service cuts in the next couple of years, coupled by a realistic possibility of postage rates rising 60-75 percent over the next decade.
Here are some questions and answers about the bill that you can use when contacting your congressman.
What does HR 756 do?
It provides about $30 billion in financial relief for the Postal Service. This is not a taxpayer bailout. The money comes from two sources: a 2.15% increase in postage rates and a change in retiree health benefits for about 77,000 postal workers. This change would require these workers to receive Medicare benefits, rather than pulling primary benefits from a separate federal government fund, the Retiree Health Benefit Fund.
How does this change affect Medicare?
Modestly. About 70,000 people in the U.S. enroll in Medicare each week. This shift would bring in only slightly more than that. But Medicare taxes have already been paid for these workers, so to the extent payroll taxes fund Medicare, these benefits have been funded.
So has USPS been paying for two separate health plans for these workers?
Yes. And because USPS has no significant source of money except postage, it means that for these 77,000, businesses that buy postage have been double paying for health benefits for this group of retirees all along. This bill would simply put this group of workers into the same retirement health plan as most Americans, and certainly the same as most companies.
What happens if the bill doesn’t pass?
The Postal Regulatory Commission has given up on waiting for Congress to act, after a decade of inaction on postal reform. It is suggesting rate increases that would amount to 60-75% increases for periodicals over the next decade.
USPS is losing First Class mail volume at a steady pace — about 6 percent just in the past fiscal quarter. First Class pays most of the bills for reaching the broad expanse of America. Cost-cutting and streamlining is a constant at USPS these days. Clearly, the organization has to face change, just as newspapers have. But Congress has to help by not adding to the woes. Much of the unpaid liability on the USPS balance sheet is because Congress in 2006 required USPS to pre-pay the Retiree Health Benefits Fund, at a rate of about $5 billion a year. USPS has been unable to do so, and its balance sheet is now full of red ink because of it. This bill would relieve that pressure and give USPS running room to continue to restructure.
Without the bill, the choices for the Postmaster General are limited: cut service, dramatically raise postage rates, or both. That is what newspaper mailers fear.
Aren’t the postage rates capped by an inflation index?
Yes, they have been, thanks to the 2006 reform law. But that law also gave the Postal Regulatory Commission power to eliminate that cap after 10 years. Now the PRC says it will do so, and put the burden squarely upon postage-payers to dig USPS out of the hole Congress created for it.
Are more service cuts coming?
USPS has already closed about half of its mail processing plants. In Texas cutbacks in Bryan, Lufkin and Waco have affected many. USPS has plans to close two more major plants in Texas: Abilene and Corpus Christi, if more cuts are necessary. Each time a plant closes it puts more pressure on the remaining plants and creates a domino effect around the state because the transportation system also changes. These service cuts have delayed the mail for most Texas newspapers and many also complain that First-Class Mail is slower, which creates problems for cash flow for smaller newspapers. Publishers have lost the loyalty of subscribers, who are tired of waiting for late news to arrive.
Why is Chairman Brady’s committee involved?
HR 756 was created by a bipartisan group of postal experts in the House Oversight and Government Reform Committee. It is supported by a majority of mailing organizations including National Newspaper Association; all four major postal unions and USPS. All of these groups endorse the bill, even though their members are “sharing the pain” of the restructuring of USPS. The Oversight Committee approved the bill on March 16. It needs the Ways and Means Committee to either quickly approve or waive its jurisdiction and let the bill go to the floor, before the August recess. Chairman Brady doesn’t need to do more work on the bill: the impact has been analyzed already by the Congressional Budget Office (CBO). All we need is for him to say: YES, this bill is good to go!
So the bill costs the government money?
No, actually, it makes the government money. It would trim the deficit by $6 billion according to CBO. It is hard to find legislation that is bipartisan, sensible, urgently-needed AND saves the government money. It would have a small impact on the Medicare fund, but the overall benefit for the government is substantial.
Why the urgency?
More delay means more risk for publishers and other mail users. The very real threat of skyrocketing postal rates is a clear and present danger to newspapers’ financial well-being. We need this bill to pass. Now.
Donnis Baggett is executive vice president for the Texas Press Association.